FCI set to issue tender for wheat exports this weekend

NEW DELHI: The Food Corporation of India plans to issue tenders by this weekend for selling wheat meant for exports to private traders.

Over 5 million tonne wheat is allowed to be exported by private players from FCI stocks with the base price for the sale fixed at 1,484 per quintal. Exporters and traders say it will be not viable to export at the current price following a crash in global prices.

"The process for issuing the tenders is on and we are hopeful of a good response," said an official. In the latest tender by PEC for export of 35,000 tonne wheat from Kandla, Emmsons was the highest bidder quoting a rate of $301.88 a tonne. "Even after a fall in global prices, we have been able to sell grains at competitive prices," said the official.

As on date, the FCI has contracted 3.68 million tonne wheat and shipped 3.1 million tonne. In March, it has shipped 0.71 million tonne wheat. In the global market, wheat prices have remained bearish. On the Chicago Board of Trade, the May futures slid 0.31% to $7.10-1/4 a bushel.

On the NCDX, wheat May futures firmed by 0.57% at 1,414 a quintal. In the Khanna mandi of Punjab, the spot rate of wheat was ruling at 1,360- 1,400 a quintal depending on the quality. Prices are expected to fall with supplies picking up.

According to the latest grain report of the US Department of Agriculture, the Indian government's approval of export of an additional 5 million tonne via private trade appears unviable unless the mandated floor price is reduced, which would increase the implied export subsidy.

Increased rail freight prices and port expense were making it not viable for exporters to bid for tender, said industry people. "I don't think anyone will bid for the tender as it come to $318 a tonne. Currently, Black sea wheat is being quoted at $260 a tonne and Ukraine at $245 a tonne," said Anil Monga, MD, Emmsons International.